S&J Harris Building Services Pty Ltd v Jacques

Invoice 657

1. Invoice 657 dated 29 December 2020 was for two supplier's invoices which totalled $2,325.15 Ex GST. The invoice also claimed 'Interest -as per signed contract - 15% p/a -x 3 months $87.20'.
2. The amount conceded by the owner $2,557.67 equates to the amount claimed for the supplier's invoices, $2,325.15 plus GST.
3. So far as the amount of $87.20 claimed for interest, this amount would only be claimable, if the amount claimed in invoice 657 was paid late. That is 14 days after the builder submitted the claim as per Schedule 1 part B (b). I find that the builder had no right to claim 3 months interest on the supplier's invoices at the same time as its claim was made. The builder's claim for interest of $87.20 is rejected. In addition quite correctly, it was not pressed.
4. The builder will be entitled to an order for the amount conceded, $2,557.67 in connection with invoice 657. The builder has a claim for contractual interest on this invoice which I will deal with later in these reasons.

Invoice 661

1. The builder's invoice 661 dated 18 February 2021 contained two claims. First a claim for $17,177.27 ex GST being a claim under clause 14(e) of the contract. Secondly a claim for interest for 1 month for $214.71. The invoice referred to the builder's letter of 26 January 2020 which referred to the amount claimed.
2. Clause 14(e) of the contract stated that if there were deletions or omissions from the works the builder would be entitled to compensation for the loss of the work on a formula which was set out in the clause.
3. At the hearing the solicitor for the builder applied to amend its Points of Claim to claim to $22,713.75 in connection with the omitted work claim. Reliance was placed on page 311 of exhibit A as the basis of the claim.
4. The owner's solicitor does not object to that course, content to make submissions which concern the substance of the claim made under clause 14(e). However the owner does not accept a liability to pay the amount claimed in invoice 661.

The contract

1. As I have found, the parties entered into Master Builder's Cost Plus contract dated 12 February 2020.
2. Schedule 3 of the contract described the work to be completed by the builder in the following terms: 1. New kitchen to new specification; 2. relocate bathroom upstairs; 3. relocate bedroom upstairs new brickwork and re-roof; 4. install new staircase to attic room; 5. new wider staircase to rear yard, includes retaining wall; 6. install new bathroom under staircase; 7. extend family room out and re-roof to engineer specs; 8. clear roof to be upgraded; 9. steel doors to be installed to the rear of the family room; 10. side windows to raised garden bed; 11. total stormwater upgrade to plumber's specification; and 12. well upgrade.
3. The drawings which identified the builder's work were specifically identified in Schedule 3(c) as architectural and structural drawings. The relevant drawings are at Tab 13 of exhibit A. The Notes to Drawings at Sheet 1 of the architect's drawings are of particular relevance to the contractual scope of work as these notes (Notes 1 - 20) describe the work to be undertaken, albeit only in general terms. The architectural drawings themselves do not contain design detail and appear to be drawings of the owner's premises as they were at the time of the contract, but with a number corresponding to the notes shown in a particular position. So in sheet 2 of the architectural plans which was the ground floor plan, where the number 8 in a circle appears, that corresponds to note 8 which states: 'A new kitchen will be in the new open space.'
4. There was no design of the new kitchen at the time the contract was signed.
5. The estimated cost of the works and fees to be paid by the owner under the contract was $750,000.00.
6. I find that because the work to be carried out was described generally in Schedule 3 of the contract and in the Notes to Drawings at Sheet 1 of the architect's drawings, the work to be carried out had not been designed as at 12 February 2020. If there were designs prepared, they were not referenced in the contract. There is also the fact that Schedule 3 of the contract did not refer to a specification. As a result of these factors it is my view that the estimate of cost could not be considered as anything more than provisional until such time as the design was developed. It was logical given the design had not been developed or even commenced, that the parties entered into a costs plus contract.
7. In construing or interpreting the provisions of the contract I will not have regard to what the builder or the owner thought the contract or the contractual scope of work meant. In Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (2015) 256 CLR 104 French CJ, Nettle and Gordon JJ stated at [46] and [50]: [46] The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose. [50] Each of the events, circumstances and things external to the contract to which recourse may be had is objective. What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating. What is inadmissible is evidence of the parties' statements and actions reflecting their actual intentions and expectations. (emphasis added)

Did the owner reduce the work to be done by the builder?

1. Clause 14(e) of the contract states: 'If the Owner reduces the work to be done by the Builder, the Builder will be entitled, as compensation for the loss of the work, to a payment which will be calculated as follows:'
2. In order to succeed in making a claim under clause 14(e) of the contract, the builder must first establish that the owner has reduced the work to be done by it.
3. The director of the builder in his statement dated 7 July 2021 stated that: 'During the Building Work the Homeowner removed a number of the Building Works from the scope of works contained in the Contract documents. The Homeowner did not discuss the removal of the work with me, she just went ahead and did it by getting Georgia Gregory to organise her own contractors and supplies. There was nothing put in writing by the Homeowner to me around using her own trades.'
4. Mrs J Harris an employee of the builder gave evidence to similar effect.
5. As was pointed out to the builder's solicitor at the hearing, in order to succeed on an omission of work claim, it is necessary to establish that the work that was omitted was part of the contractual scope of work.
6. It is the builder's case that the following work valued at $302,850.06 was omitted from the contract: 1. Adam Clerke surveyors; 2. Aspire Stone Masonry/Velder stone mason; 3. Rescue U plumbing; 4. FAF woodwork & design; 5. Attic bedroom, Bathroom, Kitchen, Dining, Office, Formal Living powder room; 6. Stainless steel in kitchen area; 7. Jetmaster supply and install; 8. Allstar Shutters & blinds & awnings - plantation shutters & jetmaster ceiling plate; 9. Sareen Stone Manhattan honed 30sqm; 10. Eco-outdoor - Filetti 30sqm; 11. Wyndham 36sqm; 12. Classic cast iron; 13. jag woodworks and woodcut; 14. indigo stained-glass; 15. ACS designer bathrooms; and 16. BTS sealing.
7. The list of allegedly omitted work is contained in a document which is at page 311 of exhibit A. The document is attached to the builder's solicitor's written submissions dated 12 October 2021 at [30]. The builder stated in cross examination that the document was prepared by himself and his wife. The builder's solicitor's submissions state that some part of it has been prepared from invoices provided by the owner under a summons to produce documents, and other parts have been prepared on the basis of the builder's invoices.

What does clause 14(e) mean ?

1. In considering the builder's clause 14(e) claim it is necessary to consider what is meant by: 'If the Owner reduces the work to be done by the Builder'
2. I find that this language means if the owner herself, or in the circumstances of this case by her interior designer Ms Georgia Gregory, acted either directly or indirectly to omit, reduce or diminish the work to be done by builder (meaning the work the builder was required to carry out under the contract) either by its own resources or by its sub-contractors or suppliers. The words 'the work to be done by the builder' in the circumstances of these proceedings means any aspect of the work or the supply of materials that comes within the descriptions of work to be completed by the builder as described in Schedule 3 of the contract, or Notes 1 - 20 as stated in Sheet 1 of the architect's drawings as referred to at Schedule 3(c) of the contract. Given the broad descriptions of this work, I find that the work to be done by the builder as referred to in this contract is as a consequence, capable of a wide interpretation.

Amendment to Scope of Works Stamped Plans - Dated 15/1/2020

1. In considering the builder's claim it is necessary to have regard to a document which was prepared by it titled 'Amendment to Scope of Works Stamped Plans - Dated 15/1/2020'. This document was signed by the owner and dated 24 November 2020 (the '24 November 2020 agreement'). The document described work carried out by the builder and in some areas of the house, detailed the work that was the responsibility of the owner.
2. In her Points of Defence dated 13 July 2021 the owner both denies that the builder was entitled to the amounts claimed on the work which I have referred to in [32 (1), (2), (3), (4), (7), (8), (9), (10), (12), (13), (14) and (15)] above and admits that such items of work were removed from the contract, pursuant to the 24 November 2020 Agreement. The owner confirmed this position during cross examination.
3. At [12] of her statement the owner stated: 'the agreement to vary the Builders Contract was made at the time quotes were being obtained for each contractor. It was made very clear to me at the time that I had the financial obligation for the trades I was responsible for and that it was no longer part of the Builder's contract.'
4. The owner stated that this document was prepared for the purpose of it being sent to the builder's insurer for the purpose of reducing its liability under the Home Warranty Insurance Certificate. The builder's evidence indicates that this view of the document puts a gloss on the background and purpose of the 24 November 2020 agreement. Mrs Harris on behalf of the builder states that on 9 November 2020: 'I had a phone conversation with Derek Boon, Master Builders Insurance Brokers, asking for advice on what we do about the work that the Homeowner removed from the contract, without our permission or any discussion, so that it doesn't become the builders responsibility in the future should the homeowner sell the home.'
5. An email dated 9 November from Mr Boon to the builder asked it to confirm whether there were any items of work to be completed by the owner and if so to provide a brief description and estimated value of the work to be provided by the owner with a scope of works provided by the owner.
6. Mrs Harris states that she prepared the 24 November 2020 agreement and sent it to the owner for signature.
7. I prefer the evidence of Mrs Harris to the owner in connection with the 24 November 2020 agreement as it provides a broader perspective of the background and purpose of the agreement. I find that the 24 November 2020 agreement was created because the owner was removing work from the contract and also because the builder wanted to ensure that the home owners insurance policy did not extend to work that it was not responsible for. I find that the owner's evidence should be understood as part of that process.
8. The owner denies the builder is entitled to the margin which it has claimed on the items of work which she has specifically identified, and which I have referred to at [37]. Nonetheless, I find based on her: 1. Points of Defence, and there are 2 documents (which are different) that may be described as her Points of Defence, one document which is at page 396 of exhibit 2, and another document which is on the Tribunal file and which is dated 13 July 2021, both documents specifically admitting that the work identified was removed from the contract, and 2. statement, that the owner has admitted that work was removed from the builder's scope of work, thus I find reducing the work to be done by the builder. Based on such admissions, I find that the builder has established for the purposes of clause 14(e), that the owner reduced the work to be done by the Builder.
9. As a result, the builder will be entitled to the margin referred to in clause 14(e) on the work which she has admitted was omitted from the contractual scope of works and on any other item of work, not admitted which the builder can establish was removed from its scope of work.
10. The owner has stated that the builder is not entitled to the amount claimed because the goods and materials were not installed by the builder and the builder was not requested to and there was no agreement for it to supervise the sub-contractors in question. I find that the purpose of clause 14(e) of the contract is, as stated, to compensate the builder if work is deducted from its scope of work. The contract provides that the rate of compensation is 7.5% applied to the cost of the work removed or not required to be done. The clause states that the amount payable is compensatory, because, I find, the builder has been denied the opportunity of carrying out the work it had both the right and obligation to carry out pursuant to the contract at a fee of 15% on the actual cost calculated in accordance with the contractual provisions. The clause compensates the builder for the loss of revenue or profit sustained by reason of the removal of the work. As a result, the issues raised by the owner as referred to above and stated in her Points of Defence are irrelevant and I find misconceived.

Omitted items not admitted

1. The owner has not admitted omitting the following work from the builder's scope the following items which have been claimed by the builder, refer [32] above: 1. Velder stone mason; 2. Attic bedroom, Bathroom, Kitchen, Dining, Office, Formal Living powder room; 3. Stainless steel in kitchen area; 4. Wyndham 36sqm; 5. ACS designer bathrooms; and 6. BTS sealing.
2. The builder stated in his evidence in chief that the owner did not discuss the removal of the work with him and that she just went ahead and 'did it by getting Georgia Gregory to organise her own contractors and supplies'.
3. The builder's director Mr Harris was cross examined. I found him to be an honest witness. It must be added that Mr Harris had his own view about his right to claim a percentage if the owner had work done. I find that the views he expressed did not on all occasions reflect what I would consider to be an accurate construction of the contractual provisions. The respondent was also cross examined. I regarded her as a witness who was very careful to answer questions having regard to her own case and the position that she had taken in the proceedings.
4. I will treat the parties' evidence with caution to the extent that they tend to give evidence of what they thought the contract stated or how it operated. I will rely on evidence of what actually happened in connection with the work and the administration of the contract.
5. I will analyse each aspect of the builder's claim having regard to the item claimed, the builder's scope of work as described in Schedule 3 of the contract, or Notes 1 - 20 on sheet 1 of the architect's drawings as referred to at Schedule 3(c) of the contract, the parties submissions, the evidence and any relevant provision of the contract.

Velder stone mason

1. The 24 November 2020 agreement states that all stone mason works including the stone retaining wall would be the responsibility of the owner. As a result I find that the Veldar work was removed from the builder's scope of work.
2. I also find that the evidence in these proceedings is that the work undertaken by Veldar was that identified at items 3 and 4 of its quote. The owner's evidence is that Veldar did not carry out the work in items 1, 2 or 5 of the quote and that she paid the builder cash of $17,000.00 presumably for the work referred to in items 3 and 4. The builder confirmed that Veldar did not carry out the work in items 1, 2 or 5 of the quote and that the owner provided him with cash and that he then paid the stone mason. T 25.
3. I find that stone masonry work was part of the contractual scope of work as referred to at note 9 of the architectural drawings and as discussed at T24 - T 28.
4. I find that the owner removed these items of work from the builder's scope such that clause 14(e) applies.

Attic bedroom, Bathroom, Kitchen, Dining, Office, Formal Living, powder room

1. Although the builder refers to these items in the document it prepared at page 311 of exhibit A, these items are not pressed in its final written submissions. Nonetheless I will consider the evidence.

Attic

1. The 24 November 2020 agreement states in connection with the attic bedroom that 3 categories of work were to be the responsibility of the owner.
2. I reject the builder's claim for the attic bedroom on the basis that the contractual scope of works as referred to at [21] and [22] does not refer to or include the 3 categories of work stated to be the responsibility of the owner in the 24 November 2020 agreement. In other words, this work was never part of the builder's scope. The builder cannot be compensated under clause 14 because the owner undertook work that it was not required to carry out.

Bathrooms

1. The contractual scope of works referred to at [21] and [22] indicates that 2 bathrooms were in the scope of the builder's work. One bathroom downstairs, one upstairs.
2. The 24 November 2020 agreement states for the downstairs bathroom that PC items, floor and wall tiles and engineered flooring would be supplied by the owner. Because of the generality of the contractual description of this work, I find that the builder was responsible for all downstairs bathroom work. I find that the owner removed these items of work from the builder's scope such that clause 14(e) applies.
3. The 24 November 2020 agreement states for the main upstairs bathroom, PC items, all tiles, all stained glass, the bath, WC basins, showers, and under stair storage and vanity would be supplied and paid for by the owner. Because of the generality of the contractual description of this work, I find that the builder was responsible for all main upstairs bathroom work. I find that the owner removed these items of work from the builder's scope such that clause 14(e) applies.

Kitchen & Dining

1. The contractual scope of works referred to at [21] and [22] indicates that the kitchen was in the builder's scope of work.
2. The 24 November 2020 agreement states in connection with the kitchen and dining area that certain work would be supplied by the owner, namely the engineered floor, tiles, joinery by FAF and kitchen PC items. Because of the generality of the contractual description of this work, I find that the builder was responsible for all kitchen work I find that the owner removed these items of work from the builder's scope such that clause 14(e) applies.

Office

1. The contractual scope of works referred to at [21] and [22] do not refer to or mention an office. I reject the builder's claim under clause 14(e) of the contract in relation to an office.

Formal living room

1. The contractual scope of works referred to at [21] and [22] does not refer to a formal living room. The plan at 158 of exhibit A shows a sitting room which I infer is the Formal living room. There is no work noted for that space.
2. I reject the builder's claim under clause 14(e) of the contract in relation to the formal living room.

Powder room

1. The contractual scope of works referred to at [21] and [22] does not refer to a powder room. To the extent that the powder room may be the downstairs bathroom, that has been dealt with above.

Stainless steel in kitchen area

1. Although the builder refers to this item in the document it prepared at page 311 of exhibit A, this item is not pressed in its final written submissions.
2. I have dealt with the kitchen above. The 24 November 2020 Agreement does not specifically refer to stainless steel. However I find that it would be included in the item: 'Kitchen area installed by FAF, supplied and paid for by owner'
3. My finding in connection with the kitchen applies to stainless steel in kitchen area.

Wyndham 36sqm

1. The builder states in its submissions that this item relates to internal tiles.
2. The 24 November 2020 agreement states in connection with tiles that all tiles on the site would be brought by the owner. Some of the items dealt with above, included tiles. I find that tiling work was included in the builder's scope of work and that the owner has as evidenced by the 24 November 2020 Agreement removed the supply and installation of tiles from the builder's scope of work in in the living room, kitchen and dining area, downstairs bathroom and main bathroom.
3. I find that the owner removed these items of work from the builder's scope such that clause 14(e) applies.

ACS designer bathrooms

1. Pages 300 - 303 of exhibit A are the installation guide for the 'freestanding tub filler faucet' for the upstairs bathroom which is discussed later in these Reasons under the heading 'failure to seal around the bath tap where it joins the floor'. I find that this item is included in the finding made in connection with the main upstairs bathroom under the category PC items.

BTS Sealing

1. A quote from BTS Sealing is at pages 175 and 286 of exhibit A. The builder states that the owner asked its sub-contractor to invoice her directly. Refer [20] of the builder's statement at page 147 of exhibit A. I accept the builder's evidence and find that the owner effectively removed this work from the builder's scope such that clause 14(e) applies.

The amount claimed under clause 14(e) of the contract

1. On 18 February 2021 the builder sent the owner invoice 661 which claimed $17,177.27 under clause 14(e) of the contract. The invoice attached an estimated list of work which had been removed or paid direct by the owner which totalled $234,840.00. 7.5% of that amount is $17,613.00.
2. As stated above at [18] and [19] the builder seeks to revise its claim to $22,713.75. Refer to [16] of the builder's final written submissions. The claim is calculated as being 7.5% of an estimated $302,850.06 which amount is calculated at p311 of exhibit A. I have found that the builder is not entitled to make a claim under clause 14(e) of the contract in connection with: 1. Attic; 2. Office; 3. Formal living room; 4. Powder room (included elsewhere); 5. stainless steel in kitchen area (included elsewhere); and 6. ACS designer bathrooms(included elsewhere)
3. Page 311 of exhibit A does not provide a means of cross referencing the amounts in the 'Invoice' column with the evidence in the proceedings. The builder's solicitor has attempted to do this at [55] - [56] of the builder's final written submissions dated 11 February 2022. These submissions indicate a variance between the evidence and the builder's workings at page 311 in the following instances: 1. Stone masonry, over-estimated in page 311 by $6,435.00; 2. Jetmaster, over-estimated in page 311 by $2,121.00; and 3. Allstar Shutters and blinds, over-estimated in page 311 by $393.25;
4. The largest component of the amount of $302,850.06 calculated at p311 of exhibit A is $85,734 which is derived from invoices at 251 - 254 in exhibit A. These invoices relate to joinery, but the invoices do not provide descriptions of the joinery and the locations where it was to be installed have not been provided. These invoices do not mention the stainless steel or the upstairs bathroom ACS faucet.
5. Having regard to the builder's calculation of the amount or value of the work 'reduced' or omitted by the owner, I find that the sum of $302,850.06 is in part based on actual evidence and in part on estimates, such as the estimate of $25,000.00 for stainless steel in the kitchen area and $12,000.00 for the ACS faucet. I also find that these estimates should be allowed as part of the reduced or omitted work in the kitchen and upstairs bathroom.
6. However having regard to the over estimates that I have referred to, the builder will be entitled to compensation for the reduced or omitted work at the contractual rate of 7.5% on the sum of $293,900.81 = $22,042.56 + GST.
7. Subject to an order for interest I will make an order that the owner must pay the builder $22,042.56 + GST = $24,246.81 + $2,557.67 = $26,804.48.

Builder's claim for interest under the contract

1. Clause 17(f) of the contract provided that if the owner did not make a payment by the due date, then the builder would be entitled to interest at the rate specified in the Schedule, which was 15% pa.
2. The builder claims interest on the amounts claimed in these proceedings.
3. The owner has conceded the amount of $2,557.67 claimed by the builder in invoice 657 dated 29 December 2020. The owner was obliged to pay the amount invoiced within 14 days (refer to the contractual definition of a day) of the claim being submitted, that is by 14 January 2021. I find that the builder will be entitled to interest at the rate of 15% pa on $2,557.67 as from 19 January 2021 to the date of this decision. The interest is $383.65 pa or $1.05 per day. I calculate the interest on $2,557.67 to be 493 days x $1.05 = $517.65. An order for that amount will be made in the builder's favour.
4. The builder has also claimed interest on the 661 which was dated 18 February 2021. However as explained in these reasons the builder has not relied on that invoice. Yet it claims interest on the invoice in its submissions on an amount that exceeds the amount claimed in the invoice.
5. Since the builder has been successful on its clause 14(e) claim, I have decided that it should be able to claim interest on the lesser amount referred to in its invoice 661, which was $17,177.27 + GST = $18,895.00. The owner was obliged to pay the amount invoiced within 14 days (refer to the contractual definition of a day) of the claim being submitted, that is by 10 March 2021. I find that the builder will be entitled to interest at the rate of 15% pa on $18,895.00 as from 10 March 2021 to the date of this decision. The interest is $2,834.25 pa or $7.76 per day. I calculate the interest on $18,895.00 to be 443 days x $7.76 = $3,437.68. An order for that amount will be made in the builder's favour.
6. The total interest found in favour of the builder is $517.65 + $3,437.68 = $3,955.33.
7. The total amount to be found in favour of the builder is $26,804.48 + $3,955.33 = $30,759.81.

The owner's claim in HB 21/19049

1. The owner in her application has raised defective work for which she claimed $120,000. The owner has no experience in the building industry. I find that there is no basis upon which she is able to give opinion evidence in the Tribunal about whether the builder breached the contract by carrying out work which was in breach of clause 1 of the contract which refers to the statutory warranties set out in section 18B of the Home Building Act 1989.
2. In order to be successful on a defects claim the owner must establish that the builder breached one or other of the statutory warranties referred to in clause 1(b) of the contract or breached clause 1(d) of the contract and that the breach caused loss or damage.
3. The owner did not follow the usual course and engage an appropriately experienced and qualified building expert to prepare a report on defects. As stated, I do not accept her evidence regarding the causes of building defects. The owner relies on a document provided by her plumbers, Rescue U Plumbing Sydney which is at pages 353-373 of exhibit 2. It is common ground that Rescue U did the plumbing work at the premises. They were engaged direct by the owner and paid by her. The Rescue U document at page 353 is relied upon by the owner as an expert report. The document does not comply with the NCAT Procedural Direction 3 that relates to expert evidence in the Tribunal. The author of the document is not identified and the experience and expertise of the author has not been stated. There is also the issue that Rescue U did plumbing work at the residence. The report does not make it clear what work was carried out by Rescue U and the issues which it was asked to investigate at the premises. The Rescue U document raises the following issues: 1. window leaking in the bathroom. It is said that water is entering the wall presumably the external wall, from external seals failing; and 2. Bath and mixer tap. It is said that water enters the ceiling space below through the mixer tap.
4. Mr N. Wilson of Rescue U Plumbing gave evidence at the hearing. Mr Wilson said that Mr White prepared the report, but he did the investigation work with Mr White. Mr Wilson stated that he is a licensed plumber and had a renovator's license. He confirmed that Rescue U did the plumbing work at the premises. I will accept the Rescue U report into evidence, but I will be careful with the weight that is to be given to its findings or conclusions.
5. In her final written submissions the owner's solicitor at [B12] states the following to be major defects: 1. Failing properly to seal the roof such that there would be no water penetration; 2. Failing properly to seal the attic and first floor bathroom windows; 3. Failing properly to seal the Juliette balcony including failure to waterproof; 4. Failing properly to waterproof the floor where pipes are located, beneath the bathroom floor, under tiles and failure to seal around the bath tap where it joins the floor; and 5. Builder's rubble in the bathroom drain.
6. At [B15] the owner's solicitor identifies the following as minor defects: 1. Cracking plaster; 2. Joins in skirting boards; and paint stains on the floor.
7. The owner's evidence in support of her claim is contained in her statement of 17 May 2021 together with annexures, which include the Rescue U document. Annexure G is an interesting document which I will consider below. The owner also relies on exhibit 3 which she prepared. This document lists defects which she has identified and the photographs which she states relate to the identified defects. The photographs are said to be designated as 'Pictures A' to 'Picture QQ'. However in the document filed, the only pictures that have been labelled are 'Pictures OO, PP and QQ'. I am left to guess what the other pictures attached to exhibit 3 are. The use that is to be made of photographs were discussed by an Appeal Panel in X-Build Construction Services Pty Ltd v O'Rourke [2020] NSWCATAP 181. At [57] the Appeal Panel stated: 'Further, how a court or tribunal may use photographs is the subject of restraint, although there is some uncertainty as to precisely how much restraint.'
8. Referring to Blacktown City Council v Hocking [2008] NSWCA 144, the Appeal Panel cited the following passages from the judgement of Tobias JA which I consider to be relevant: Tobias JA, with whom Giles JA agreed, said at [167]: "[167] The use of photographic evidence has been the subject of discussion in this Court. Its admissibility as a visual reproduction is beyond doubt: R v Travers (1958) 58 SR (NSW) 85 at 108. However, in Short v Barrett, Court of Appeal, 5 October 1990 (unreported), Meagher JA, with the concurrence of Clarke and Handley JJA, observed that in relying on his own interpretation of photographic evidence, the trial judge had overlooked the "sage advice" of Lord Reid in C Van der Lely NV v Bamfords Ltd [1963] RPC 61 at 71. His Lordship said: 'Lawyers are expected to be experts in the use of the English language, but we are not experts in the reading or interpretation of photographs. The question is what the eye of the man with appropriate engineering skill and experience would see in the photograph, and that appears to me to be a matter for evidence. Where the evidence is contradictory the judge must decide. But the judge ought not, in my opinion, to attempt to read or construe the photograph himself; he looks at the photograph in determining which of the explanations given by the witnesses appears to be most worthy of acceptance.'" And at [169]: "It should be noted that the use by a trial judge of photographs is nothing new. They can, as the authorities to which I have referred confirm, be descriptive of what a witness says he or she saw, being a representation of the witness' knowledge and observations. But they should not be used by a judge to make findings of fact which are otherwise unsupported
9. Given that the owner has prepared exhibit herself and has no qualifications, and the photographs attached to the document are not properly cross referenced, I find exhibit C to be of little assistance in these proceedings.
10. In her statement which is dated 17 May 2021 the owner attaches a document which she has prepared and which she describes at [34] as an updated defective work schedule, which is annexure G to her statement. In a column titled 'Action' in a number of instances, she has stated 'Agreed defect' indicating that the builder has agreed the defect which she has referred to. In exhibit A at tab 9 the builder has provided a written document which responds to the owner's 17 May statement. In response to [34] it states, among other things: 'The builder needs to be given an opportunity to go to site with the relevant trades (to) ascertain who is responsible.'
11. In response to annexure G itself, on 1 July 2021 the builder's solicitor served the owner's solicitor with the builder's written response to annexure G of the owner's statement dated 17 May 2021. This document is at tab 10 of exhibit A.
12. Where the owner states 'Agreed defect' in annexure G to her statement, I will not accept that a defect has been accepted by the builder unless the builder has agreed in its written response that an item referred to by the owner is in fact a defect.
13. Having identified the owner's evidence in support of her defects claim and in order to determine that claim it will be necessary to address the defects which are identified by the owner's solicitor, as referred to in [92] and [93]. The owner's solicitor has not referred to the evidence which the owner relies upon in connection with each particular defect alleged and as referred to in [92] and [93]. Generally, the owner's submissions state that the Rescue U Plumbing document is relied upon. The owner's evidence is also relied upon. As stated I do not accept the owner as able to provide opinion evidence about whether or not the quality of the builder's work was in breach of clause 1 of the contract. The owner also relies on the document which is at annexure G of her 17 May 2021 statement and the 'admissions made thereon'. As I have explained above, I do not accept that annexure G contains admissions by the builder. If any admissions are to be found, the document that will form the foundation of such a finding is the builder's written response to annexure G of the owner's statement dated 17 May 2021 at tab 10 of exhibit A. The owner's final submissions also state that admissions by the builder in cross examination would be relied upon, although unhelpfully transcript references are not provided.

Builder's admissions

1. In order to address the owner's defects claim it will be efficient to consider whether the builder has made admissions or concessions either in its evidence or final written submissions. The builder's solicitor's final written submissions make no clear admissions regarding defective work. The builder's written response to annexure G of the owner's statement dated 17 May 2021 at tab 10 of exhibit A in some cases states 'Builder will rectify' or 'S&J Harris will rectify' or 'S&J Harris will fix'. I find that these statements indicate that the builder accepts that it is responsible for rectification, which I infer to mean that the work carried out by it or its subcontractors. The defects accepted by the builder are: 1. Stained window seal main bathroom- leak tested and shown to be leaking; 2. Residual paint left in multiple sites; 3. Various roof defects needing sealing as shown in pictures Y and Z; 4. Upstairs external gap needs seal; 5. Paint lifting in dining room; 6. Crack in unidentified wall shown in picture MM.
2. I will now address the items stated by the owner's solicitor to be defects major

Failing properly to seal the roof such that there would be no water penetration

1. Insofar as the owner relies on the Rescue U Plumbing document I find that the evidence contained in that document does not establish that the builder failed properly to seal the roof such that there would be no water penetration. If the owner provides an opinion to that effect I do not accept it. The builder's written response to annexure G of the owner's statement dated 17 May 2021 makes limited admissions about this matter.
2. The cross examination of the builder did not result in admissions on this item.
3. I find that the owner has been successful in this aspect of her claim, to the extent admitted by the builder.

Failing properly to seal the attic and first floor bathroom windows

1. The builder has accepted responsibility for the stained window seal in the main bathroom.
2. The Rescue U Plumbing document does not establish that the builder failed properly to seal the attic. If the owner provides an opinion to that effect I do not accept it.
3. The cross examination of the builder did not establish that the builder failed properly to seal the attic or secure an admission to that effect.
4. I find that the owner has been successful in this aspect of her claim, to the extent admitted by the builder, namely the stained window seal in the main bathroom.

Failure properly to seal the Juliette balcony including failure to waterproof

1. The Rescue U Plumbing document does not establish that the builder failed properly to seal the Juliette balcony including failure to waterproof. If the owner provides an opinion to that effect, I do not accept it for reasons already provided. The builder's written response to annexure G of the owner's statement dated 17 May 2021 makes no admission about this subject.
2. On 21 August 2020 Damp Busters provided certificate 2339 to the builder certifying that it had waterproofed among other things the balcony on the first floor of the owner's premises. I find that the balcony referred to is the Juiliette Balcony described at note 14 on the Notes to Drawings referred to in context of the contract. A copy of the certificate is at page 288 of exhibit A. A photograph of the Juiliette Balcony area is at page 294 of exhibit A.
3. While the cross examination of the builder did address the Juiliette Balcony, it did not establish that the builder failed properly to seal the Juliette balcony including failure to waterproof or secure an admission to that effect. At the highest, the cross examination obtained an agreement from the builder at T.88 that if it was at fault with leaking from this area, it would be responsible for rectification.
4. At T92 Mr Harris of the builder was taken to exhibit 3 and the document contained therein from Blanche from Water Damage Specialist which states after referring to the installation of drying equipment: 'Balcony on top level looks not to be sealed correctly allowing moisture to penetrate through the structure to the level below through the brickwork directly underneath the balcony area is saturated away from that area on the same wall is a dry.'
5. Mr Harris suggested that other trades engaged by the owner may have made penetrations into the wall which is behind the Juliette Balcony causing the water ingress complained of. In short Mr Harris did not agree that the builder had failed to seal or waterproof the Juliette balcony and suggested that other trades may have been responsible. Mr Harris stated that before he would concede that there was defective work involved for which he was responsible, he would like to inspect the site to reach a conclusion.
6. While the above passage is not necessarily from a person who has established expertise in this area, the gist of the letter is that the balcony which I infer is the Juliette balcony, has not been sealed and has allowed moisture to penetrate through to the level below which I also infer would be the ground floor area. The document from Water Damage Specialist is relied upon as an expert opinion although it does not comply with any of the Tribunal requirements relating to expert evidence, or indeed the Tribunal directions for the provision of evidence. Nonetheless it was admitted into evidence without objection subject to weight. I must decide what weight should be given to it.
7. I find that the owner's evidence does, at the bare minimum level persuade me that there has been a failure properly to waterproof the Juliette balcony. I have intentionally not used the word 'seal' as it is general and the term 'waterproof' is capable of a more precise understanding and therefore indicates what is required for the provision of a rectification solution.

Failure properly to waterproof the floor where pipes are located, beneath the bathroom floor, under tiles and failure to seal around the bath tap where it joins the floor `

1. The Rescue U Plumbing document does not establish that the builder failed properly to waterproof the floor where pipes are located, beneath the bathroom floor or under tiles. The builder's written response to annexure G of the owner's statement makes no admissions in relation to these issues.
2. As stated on 21 August 2020 Damp Busters provided certificate 2339 to the builder certifying that it had waterproofed among other things the ground floor laundry area and bathroom and a bathroom (1 off) and balcony on the first floor. There were two bathrooms included in the builder's scope of work, refer [21(2)] and [21(6)] hereof. I am satisfied that the certificate refers to the ground floor and first floor bathrooms.
3. I find that the cross examination of the builder did not establish that the builder failed properly to waterproof the floor where pipes are located, beneath the bathroom floor or under tiles, or secure an admission to that effect.
4. I find that the owner has not established that there was a failure by the builder to waterproof the floor where pipes are located, beneath the bathroom floor or under tiles. I accept that the builder's subcontractor Damp Busters certified that it had waterproofed among other things, the first floor bathroom and that there is no evidence to suggest that the waterproofing was deficient.
5. I find that the compelling inference to be that it was the owner's plumber Rescue U Plumbing who did the work to install the bath tap in the upstairs bathroom, a photograph of which is to be found at 296 of exhibit A. At T104, Mr Harris described the piece in question as a 'bath filler and a hand - held tap. A hand held shower piece'. Rescue U Plumbing's invoice 11363 is at page 245 - 247 of exhibit A. It sets out all of the work that they did including on 10 August completing all plumbing works, which I infer included plumbing work in the upstairs bathroom and on 1 September 'Remove floor mixer so tilers could complete'. In Rescue U Plumbing's invoice 12462 they state that they sealed the penetration in the upstairs bathroom on 19 October and noted the need to install taps once stone was in. This evidence establishes that Rescue U Plumbing did the work to install the bath tap in the upstairs bathroom, as referred to and described by Mr Harris, above. If there is any doubt about this, such doubt is dispelled by the owner's evidence in cross examination that the plumbing work was to be carried out by her plumber dealing directly with her.
6. The Rescue U Plumbing document does address the bath tap where it joins the floor. At page 356 of exhibit 2, Rescue U Plumbing state: 'water is managing to get into the base of the mixer and pool in the bottom before running out and leaking onto the timbers between the floors and damaging the ceiling below'
7. Rescue U Plumbing also state on page 356: 'Bath mixer tap, water entering ceiling space below through the mixer tap, waterproofing membrane isn't present under or over the body of the mixer, during the course of the renovation we advised scott that the mixer was required to be installed completely at rough in stage as per the manufacturers installation instructions which he decline to listen to, so we undertook the works as per his instructions "as the builder".
8. This statement by Rescue U Plumbing which seeks to make the builder responsible for this defect suffers from a deficiency that the builder's instruction allegedly given has not been identified, nor has the way in which the mixer was installed, purportedly in compliance with such instruction, been described. In his statement of 7 July 2021 at [83] Mr Harris on behalf of the builder states that the plumber's statement as extracted above is totally incorrect and did not happen. He refers to annexure K which he states establishes that the mixer was installed at the rough in stage. A colour photograph of annexure K is at page 289 of exhibit A, which shows the mixer having been installed at preliminary stage of the bathroom construction process before the bathroom floor was placed into position. I find that it was Rescue U Plumbing who did the relevant work.
9. At T102 - T105 I asked the builder a number of questions concerning the sequence of work in the upstairs bathroom. Mr Harris explained the sequence of work as well as the waterproofing that occurred. Based on the finding that Rescue U Plumbing carried out the plumbing work in the upstairs bathroom, I find that the mixer and bath tap was installed by Rescue U plumbing as shown on pages 289 and 296 of exhibit A in the bathroom subfloor and after the floor was placed, it was waterproofed in the waterproofing process that Mr Harris described at T103 (5093 - 7) and at T104 (5098 -5106) and (5132 - 9) and T105 (5161 - 8). There are also the photographs at 291, which show the heating elements to which Mr Harris has referred to over what appears to be a waterproofed surface. In addition the waterproofing of this area has been certified.
10. Based on the reasons provided I find that the owner has failed to establish that the builder failed to seal around the bath tap where it joins the floor as alleged by her in her final written submissions. I also for the reasons provided reject the opinion provided by Rescue U Plumbing as referred to at [93] above.

Builder's rubble in the bathroom drain

1. The owner's final written submissions do not refer to the evidence which is specifically relied upon to establish this alleged defect. In its written response to annexure G of the owner's statement dated 17 May 2021 the builder has not admitted leaving builder's rubble in the bathroom drain. The Rescue U Plumbing document does not refer to builder's rubble in the bathroom drain. Annexure G to the owner's 17 May statement does not address this issue.
2. Exhibit C contains an unidentified photograph which shows an open drain which I infer is in a bathroom or laundry with some rubble which I infer has been extracted from it. I find this to be evidence which has some weight. In making a work order, I will order the builder to open the drains in the bathrooms and laundry and remove any rubble that may still be present.

Cracking plaster

1. The owner's final written submissions do not refer to the evidence which is specifically relied upon to establish this alleged defect. Annexure G to the owner's 17 May statement does not address this issue. Exhibit C contains unidentified photographs which show what appears to be cracking plaster. Where the photographs were taken is not identified. Nor is there any evidence that the builder carried out specific plaster work and that its plaster work has cracked as shown in the relevant photograph. I find that the owner has failed to prove this aspect of her case on the balance of probabilities. This aspect of her claim is rejected.

Joins in skirting boards; and paint stains on the floor

1. As with other items, the owner's final written submissions do not refer to the evidence which is specifically relied upon to establish this alleged defect. Annexure G to the owner's 17 May statement addresses the issue of residual paint left in multiple sites. There are also photographs of joins in skirting boards. In its written response to annexure G of the owner's statement dated 17 May 2021 the builder stated that it would complete residual paint left in multiple sites. The builder did not admit responsibility for joins in skirting boards based on an issue that is described as the 'Waterboard Choke Leak' at [22] - [24] of Mr Harris's 7 July statement. Mr Harris's evidence is that there was a leak due to a sewage issue for which the builder was not responsible and that this is the cause of unacceptable joins in skirting boards
2. I find that the owner has failed to establish that the builder actually carried out the provision of skirting boards and that the gaps in the joins of the boards was caused by a breach of contract by the builder and that the cracks were not caused by the Waterboard Choke Leak issue as identified by the builder.

Section 48MA of the Home Building Act

1. The owner has not provided any evidence to substantiate her claim of $120,000.00. However the parties agree that a work order should be made in connection with findings of defective work. The defective work found in favour of the owner is: 1. Stained window seal main bathroom- leak tested and shown to be leaking; 2. Residual paint left in multiple sites; 3. Various roof defects needing sealing as shown in pictures Y and Z; 4. Upstairs external gap needs seal; 5. Paint lifting in dining room; 6. Crack in unidentified wall shown in picture MM; 7. Failure properly to waterproof the Juliette balcony; and 8. Clear rubble from drains in bathrooms and laundry.
2. Pursuant to s 480(c) of the Home Building Act I will order the builder at its own cost to carry out the necessary work to rectify the defects referred to above, such work to comply with s18B(1) of the Home Building Act.
3. Also pursuant to s 480(c) of the Home Building Act I order the owner to provide such access to the residence the subject of these proceedings as is necessary for the builder to carry out the work ordered. The builder's obligation to carry out the work as ordered is conditional upon the owner providing access as ordered.

Costs

1. In the event that a party wishes to bring a costs application, the costs application must be lodged in the Tribunal and served on the costs respondent within 14 days of the date of the orders in these proceedings either attaching or referring to the documents relied upon in support of the application.
2. The costs respondent will have 14 days after the date it or she receives the application to lodge in the Tribunal and serve on the costs applicant its or her submissions, if any, in response to the costs application, such submissions either attaching or referring to the documents relied upon.
3. The parties must state in their submissions whether or not they consent to the costs application being determined on the basis of the parties written submissions and attached documents, if any, without the need for a hearing.
4. Subject to the parties' submissions, the Tribunal will determine any costs application made on the basis of the papers lodged in the Tribunal.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 August 2022